Paytm founder exits board amid RBI action
In response to regulatory actions from the Reserve Bank of India (RBI), digital payments giant Paytm announced significant changes to its board on Monday. Founder Vijay Shekhar Sharma is set to step down as the non-executive chairman and board member of Paytm’s payments bank unit, as part of the company’s restructuring efforts following supervisory concerns raised by the central bank.
The RBI directed Paytm Payments Bank to wind down operations by March 15 due to persistent non-compliance and substantial supervisory concerns, leading to a notable decline in Paytm’s stock value. Sources revealed that the regulatory intervention was prompted by issues such as inadequate customer identification practices and a perceived lack of arms-length separation from Paytm.
As part of the board overhaul, Paytm announced the appointment of new members, including Srinivasan Sridhar, former chairman of state-owned Central Bank of India, and Ashok Kumar Garg, former Bank of Baroda Executive Director. Two retired Indian Administrative Service officers are also set to join the board, according to an exchange filing by Paytm.
The digital payments company emphasized its commitment to compliance and best practices, stating that the expertise of the newly appointed board members will play a crucial role in enhancing governance structures and operational standards. Paytm Payments Bank CEO Surinder Chawla expressed confidence in the new board’s ability to guide the company through these changes.
In supporting the move toward an all-independent and executive director board for the banking unit, Paytm clarified that Sharma’s decision to step down is aimed at facilitating a smooth transition. Vijay Shekhar Sharma holds a 51% stake in Paytm Payments Bank, while the remaining ownership belongs to One 97 Communications, Paytm’s formal entity.
